Union Trust Co. v. Wilson - 198 U.S. 530 (1905)
U.S. Supreme Court
Union Trust Co. v. Wilson, 198 U.S. 530 (1905)
Union Trust Company and Security
Warehousing Company v. Wilson
Submitted January 6, 1905
Decided May 29, 1905
198 U.S. 530
Prior to the petition, the bankrupt, a wholesale merchant in Chicago, walled off part of the basement of his store and let it at a nominal rental to a warehouse company, and there stored goods, so that they were not seen from the store, and the company alone had access thereto, and it exhibited signs to the effect that it occupied the premises and had possession of the goods, it charged the merchant for storage, and issued to him certificates or receipts for the goods, which he pledged and endorsed over to banks as collateral for loans. In an action brought by the trustee who claimed that goods were in the possession of the bankrupt, and not of the warehouse company, held that:
A bailee asserting a lien for charges has the technical possession of the goods. The transfer of a warehouse receipt is not a symbolical delivery, but a real delivery to the same extent as if the goods had been transported to another warehouse named by the pledgee.
Upon the facts in this case, there is no reason to deny such a place of storage the character of a public warehouse so far as the Illinois statutes are concerned.
The receipts issued in this case were to be deemed valid warehouse receipts so that their endorsement and delivery as security for loans constituted a pledge of the goods represented thereby valid as against attaching creditors, and if the receipts were not valid as warehouse receipts, the transaction constituted an equally valid pledge of the goods as such security.
Upon the facts, the following questions of law were certified:
1. Whether, upon the facts above recited, the receipts issued by the warehousing company are to be deemed valid warehouse receipts, so that their endorsement by Flanders to the trust company, as security for loans, constituted a pledge or pledges to the trust company of the leather covered by such receipts, which would be valid against attaching creditors.
2. Whether, if the receipts are not to be deemed valid as warehouse receipts, upon the facts above recited, the transactions are to be regarded as constituting pledges of such leather
by Flanders to the trust company, which would be valid as against attaching creditors.
3. If there was no pledge, whether the trust company, under the facts above recited, acquired an equitable lien upon such leather that is superior to the title thereto of the trustee in bankruptcy.